Sutton v Nicol[2021] QCAT 137

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   By order made 9 July 2019 proceeding BDL145-19 and proceeding BDL172-19 were consolidated. The consolidated proceeding is BDL145-19.
2. [2]
   The dispute the subject of these proceedings arises out of performance by the builder Mr Nicol of a contract for the construction of a deck over the top of a swimming pool at Mr Sutton’s property.
3. [3]
   Mr Sutton claims relief from payment of the balance contract sum and damages for breach of contract. Mr Nicol claims the balance contract sum and the value of certain variations to the contract. Both parties deny the other’s claim.
4. [4]
   The proceeding relates to a domestic building dispute.^[1]  I note that there has been compliance with s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) and that this Tribunal has jurisdiction to decide the dispute.^[2]

The Contract

5. [5]
   The contract documents before the Tribunal comprise:

   1. (a)
      Schedule for QBCC level 1 renovation, extension and repair contract dated 29 March 2019;
   2. (b)
      Plans prepared by Jeffrey Hills & Associates – Drawing No JHA 190051 (four sheets) dated 28 February 2019.
6. [6]
   Despite a request by the Tribunal prior to the hearing of this matter and subsequent Directions to the parties, no copy of the General Conditions of the Contract has been provided to the Tribunal.
7. [7]
   The contract price for the works is said to be $28,500.00. This sum includes an amount of $18,500 for materials to be borne by the owner. The evidence is that Mr Nicol ordered the materials and Mr Sutton paid for the materials.
8. [8]
   Item 8 of the contract Schedule refers to total progress payments of $10,000.00 to the builder, comprised of a payment of $2,000.00 to be paid at the start of the project on account of materials and  a payment of $4,000.00 to be paid at the start of the project on account of labour and $6,000.00 at practical completion.
9. [9]
   Item 8 records receipt of $6,000.00 on 29 March 2019.
10. [10]
    The engineering drawings provide relevantly:

    1. (a)
       Joists - 240 x KD HWD F17 @ 450c-c (centre to centre).
    2. (b)
       27 joists are depicted on the drawing.
    3. (c)
       Notes on the drawing provide that all works are to be inspected by the engineer.
11. [11]
    The engineering drawings do not specify the type of material to be used for the floor of the pool cover, however Item 3 of the contract Schedule describes the works as “Pool cover 250 x 50 F17 Scyon Board”.
12. [12]
    Mr Nicol’s evidence is that the contract was varied in the following respects:

    1. (a)
       A hatch on one side was requested and provision was made for the hatch by construction of “nogs”, but the hatch was never constructed.
    2. (b)
       Digging and removing soil for a cost of $600.00.
13. [13]
    Although not described by Mr Nicol as a variation a further sum of $720 is claimed for cutting and welding work which the evidence reveals is outside the original scope of work.
14. [14]
    A difficulty arises in construing the contract in this case because Mr Nicol recorded the contract terms in the Schedule document but did not provide the general conditions referenced in the Schedule to Mr Sutton at any time. At the hearing neither party sought to prove the terms of the contract by reference to the general conditions. Neither party had reference to the general terms of the contract when entering into the agreement. However, both referred to clause 26 when purporting to terminate the contract.
15. [15]
    The parties were directed to provide submissions as to whether the general terms form part of the contract. Neither party has complied with the directions of the Tribunal.
16. [16]
    I have attempted to locate the general conditions as at January 2017 which accompany the form of contract Schedule used by the parties. I have been unable to locate the document by way of an internet search.
17. [17]
    In some circumstances general terms and conditions referred to in a document such as the Schedule may be incorporated as part of a contract, whether a party signing the Schedule has read the general conditions or not.^[3] However, a question arises as to whether Mr Sutton assented to the general conditions in circumstances where he was not provided with a copy when he entered the agreement with Mr Nicol.  The Schedule warns the owner to read the general conditions before signing. The warning does not say expressly that the general conditions set out in a different document form part of the contract. Each item in the Schedule cross refers to general conditions by number. One would think that would put a party on notice that other conditions are relevant to the contract. However, Mr Sutton was not provided with the conditions, he did not read the conditions and he did not seek to rely on the conditions at the hearing or in later submissions available to him. Item 13 of the Schedule refers to the contract documents. It is ticked with respect to Plans and Foundations Data and notes that Specifications are not applicable. It notes that there are no prime cost items and no provisional sums. There is no reference in that part of the Schedule to the general conditions.
18. [18]
    Importantly in a box at the end of the Schedule, after the signing clause, is a notation stating that:

This Contract includes:

Homeowner’s Booklet (incl. Contract Checklist and General Conditions) and Contractor’s Booklet, both dated January 2017; and

The Contract Schedule, PC and PS Schedules and Forms 1-5, all dated January 2017; and

Plans, specifications and any other contract documents described in Schedule Item 13.

19. [19]
    Next to each document listed is a box for ticking to signify that the documents are intended to form part of the contract. No box is ticked.
20. [20]
    I am not satisfied that Mr Sutton assented to the general conditions forming part of the contract because they were not provided to him at the time he entered the contract and the Schedule does make it sufficiently clear that the general conditions in the Homeowner’s Booklet form part of the contract. If the notation set out above had appeared before the signing clause and if the box next to the “Homeowner’s Booklet”  had been ticked, I may have formed a different view. I do not consider that by signing the Schedule Mr Sutton was agreeing to be bound by the general conditions set out in the Homeowner’s Booklet.
21. [21]
    In the circumstances, I find that the contract does not include the general conditions set out in the Homeowner’s Booklet. The contract Schedule otherwise conforms with section 14 of the QBCC Act as an enforceable contract.

Mr Sutton’s evidence

22. [22]
    Mr Sutton claims that the work performed by Mr Nicol was defective and incomplete.
23. [23]
    His evidence^[4] is that:

    1. (a)
       the joists were spaced more than 450 mm centre to centre requiring the installation of additional joists.
    2. (b)
       Some joists were too short.
    3. (c)
       Welding was poor workmanship.
    4. (d)
       Floor sheeting was laid over the joists before the engineering inspection.
    5. (e)
       Timber was not sealed and was out of alignment.
    6. (f)
       One footing had no nuts or bolts.
    7. (g)
       The floor was not level.
    8. (h)
       There were gaps between joists and bearers.
    9. (i)
       It was necessary to engage a contractor, Mr Barr, to undertake rectification work to a value of $3,500.00.
24. [24]
    Mr Sutton’s evidence is supported by photographs of the allegedly defective work. Despite the complaints made by Mr Sutton about the quality of the work performed Mr Sutton only sought to recover the cost of rectification by the installation of more joists and for completion of the works.
25. [25]
    Mr Ahsin Waris, Engineer from Jeffrey Hills & Associates, gave evidence consistent with a site inspection report dated 29 April 2019^[5] that:

    1. (a)
       An inspection occurred on 24 April 2019 affirming aspects of the work were acceptable, however noting that some joists were at a spacing greater than the specified 450mm centre to centre. A second inspection on 26 April 2019 confirmed the spacing of the joists following a re-measurement.
    2. (b)
       It was concluded that some elements of the structure are not built as specified in the drawings based on which a Form 16 cannot be provided. The report provides that the requirements to obtain a Form 16 are:

       1. Install additional joists where the spacing between joists exceeds 450 mm (centre to centre) spacing.
       2. The size of the additional joists should be 240x45 F17 hardwood.
26. [26]
    Despite this report the evidence reveals a Form 16 signed by Jeffrey Hills dated 26 April 2019.  Mr Waris could not explain the existence of the Form bearing that date.  However, Mr Sutton’s material also includes a letter dated 5 September 2019 from Mr Waris confirming that certification for the timber deck over the swimming pool has not been provided. Mr Waris went on to confirm that once the defects, being the spacing of the joists, are rectified a Form 16 certification can be provided.
27. [27]
    Mr Sutton’s evidence is that he received the Form 16 in November 2019, despite its date.
28. [28]
    Mr Barr, a licensed carpenter, gave evidence consistent with his statement filed in the proceedings.^[6]
29. [29]
    Mr Barr confirmed that he undertook the following rectification work:

    1. (a)
       remove sections of “Durafloor” sheeting to enable installation of an extra five floor joists.
    2. (b)
       Repair and complete installation of Durafloor sheeting, 15 sheets required. The 15 sheets were originally purchased by Mr Sutton and intended to be installed as skirting on the deck.
    3. (c)
       Screw down entire floor area.
    4. (d)
       Cut and install two access panels (hatches).
    5. (e)
       Provide and install a vertical perimeter sheet.
    6. (f)
       Seal all screws as per manufacturer’s instructions.
30. [30]
    Mr Barr rendered an invoice to Mr Sutton for $3,500.00 not broken down as to each component of work. In cross examination he attributed a cost of $500.00 to the vertical skirting and $200.00 to the cost of the hatches.
31. [31]
    Mr Barr attached a site inspection report from Jeffrey Hills & Associates dated 18 November 2019 to his statement. The report was prepared by Mr Waris and confirmed that following inspection the deck is approved for Form 16 Certification. Mr Barr also attached a copy of the 26 April 2019 Form 16 certification by Jeffrey Hills to his statement of evidence.
32. [32]
    Mr Sutton’s evidence is that the following events occurred:

    1. (a)
       26 April 2019: Mr Sutton told Mr Nicol that the work could not be certified because of the distance between the joists.
    2. (b)
       Mr Nicol then abandoned the site, taking all his tools and demanded final payment for the works. At that time not all sheets had been laid.
    3. (c)
       26 April 2019: Mr Nicol presented Mr Sutton with an invoice for full payment of the balance contract price of $5,462.00.
    4. (d)
       27 April 2019: one of Mr Nicol’s labourers approached Mr Sutton for payment of $700.00 for welding undertaken by him. He was not paid.
    5. (e)
       28 April 2019: Mr Nicol emailed Mr Sutton. I note the email sets out Mr Nicol’s grievances that Mr Sutton had taken control of the site, abused him, engaged the wrong machines, not invited him to meetings with the engineer, refused to pay his account, refused to pay the welder and said that he had not agreed to the contract sum. On the basis that Mr Sutton refused to pay him and the welding contractor, told him not to come back to site and disputed the contract and money owing, Mr Nicol gave 10 days’ notice to remedy breaches and gave notice of termination under clause 26.1 of the general conditions if the breaches were not remedied.
    6. (f)
       29 April 2019: Mr Sutton emailed Mr Nicol inviting him back to the worksite to rectify mistakes at his cost within 10 business days otherwise the contract would be terminated in accordance with clause 26.1 of the general conditions.
    7. (g)
       30 April 2019: Mr Nicol emailed Mr Sutton withdrawing his termination notice and demanding payment.
    8. (h)
       30 April 2019: Mr Nicol emailed Mr Sutton requesting payment and advising that if the pool was drained and five joists were on site he would do the work for no charge, but required payment first.
    9. (i)
       6 May 2019: Mr Nicol emailed Mr Sutton giving a notice under clause 26.3 of the general conditions stating there had been a failure to pay him and the welding contractor and he had been told not to come back onsite unless he complied with conditions. Mr Sutton was given 10 business days to remedy these breaches otherwise the contract would be terminated.
    10. (j)
        6 May 2019: Mr Sutton advised Mr Nicol the matter was with the QBCC.
    11. (k)
        16 May 2019: Mr Sutton emailed Mr Nicol requesting rectification of mistakes, that Mr Nicol pay for new materials and any materials damaged and that repairs undertaken be completed to Engineers’ specifications. Mr Nicol was given seven days to reply.
    12. (l)
        19 May 2019: Mr Nicol gave notice under clause 26.3 of the general conditions that because Mr Sutton had failed to pay money due and substantially or persistently obstructed the contractor in the performance of work and the time period had now lapsed with no steps to remedy breach, the contract was terminated, reserving rights for recovery of loss and damage.
    13. (m)
        24 May 2019: Mr Nicol advised Mr Sutton that the contract was cancelled and that he had applied to QCAT.
    14. (n)
        24 May 2019: Mr Sutton terminated the contract as a result of no reply to the email of 16 May 2019.
    15. (o)
        26 May 2019: Mr Nicol advised Mr Sutton that because of no reply to his termination notice the contract was terminated.

Mr Nicol’s evidence

33. [33]
    Mr Nicol’s evidence^[7] is that:

    1. (a)
       Mr Sutton instructed a hatch was to be constructed in the deck, hence the first joist being over 600mm wide to allow for the man-hole.
    2. (b)
       He could not place joists where the perimeter brackets are located; they had to be moved to one side, changing the spacing of the joists.
    3. (c)
       A hatch was prepared for but not constructed.
    4. (d)
       The majority of joists had a 30 to 50mm bow so most of them are not 450mm in the centre.
    5. (e)
       Mr Sutton did not want to buy any more joists.
    6. (f)
       Mr Sutton requested a change to the engineering design to follow the shape of the pool.
    7. (g)
       Welding to the piles was done by a contractor, not a labourer, for half the price of a contractor to be engaged by Mr Sutton.
    8. (h)
       He only priced the job to do 25 joists. (I note that this evidence is given in Mr Nicol’s 9 January 2019 statement, but in his 13 June 2019 statement attached to Exhibit 9 he says he priced the job for 27 joists).
    9. (i)
       The engineer has not said the work is defective, just to put in extra joists and he will pass it.
    10. (j)
        10 hours were spent hand digging soil and taking it to the road at a cost of $600. He alleges Mr Sutton ordered the wrong machine for that job and there was no alternative but to do that work. Acknowledging there was no written variation, Mr Nicol said he wished to claim that amount on a quantum meruit basis.
    11. (k)
        There is a Form 16 signed by Jeffrey Hills, accordingly there should be no cause for complaint by Mr Sutton.
    12. (l)
        He has terminated the contract and claims payment in accordance with his final invoice.
    13. (m)
        As to the work undertaken by Mr Barr he asserts that it was not part of the contract for him to put on vertical sheeting as installed by Mr Barr and it was not part of his contract to construct two hatches.
    14. (n)
        As at 26 April 2019 the work remaining, excluding installation of additional joists, was to install 12 sheets of board. Mr Nicol did not intend to do that work and he deducted the cost from the final account.

Issues

34. [34]
    The issues raised by these proceedings are:

    1. (a)
       Is either party in breach of the contract?
    2. (b)
       Which party lawfully terminated the contract?
    3. (c)
       What relief follows from a lawful termination of contract?

Is Mr Sutton in breach of contract?

35. [35]
    Mr Nicol alleges that Mr Sutton’s conduct entitles him to terminate the contract. The conduct alleged is refusal to pay the contract sum, disputing the contract sum and interference in Mr Nicol carrying out the contract.^[8]
36. [36]
    Mr Sutton’s evidence is that he challenged a number of aspects of the final invoice, provided on 26 April 2019 including that he had never been provided with copies of receipts for materials purchased by Mr Nicol with the $2,000.00 paid by him for the purchase of materials; he points to a calculation discrepancy and says that in relation to a charge of $720 for cutting and welding he has not been provided with a copy of any invoice from a contractor for that amount.  Mr Sutton maintains that the welding work was performed by a labourer employed by Mr Nicol and that the cost of labour in the contract would accordingly cover his work.^[9]
37. [37]
    A question arises as to whether the invoice fell due for payment on 26 April 2019 when it was delivered by Mr Nicol, with a demand for payment on that day. For reasons given more fully below I find that the invoice was not due for payment on 26 April 2019 and that Mr Sutton is not in breach of contract by refusing payment on 26 April 2019. I find that no payment of the final invoice fell due because practical completion had not been reached and the contract is an entire contract whereby the amount of the final invoice is not recoverable where the works are not completed.
38. [38]
    In relation to Mr Sutton’s conduct in raising issues in relation to calculation of the final invoice I do not consider that is unreasonable in the circumstances. The conduct does not amount to a breach of Mr Sutton’s obligation to pay for the work performed under the contract when it fell due for payment.
39. [39]
    Other than complaints about the extent of Mr Sutton’s day to day involvement in the project which obviously created some tension between the parties, Mr Nicol has not demonstrated how that conduct amounts to a breach of Mr Sutton’s obligations under the contract or at law.
40. [40]
    For these reasons I find that Mr Sutton is not in breach of his obligations under the contract on the grounds raised by Mr Nicol.
41. [41]
    Further Mr Sutton demonstrated that he was ready and willing to complete the contract upon Mr Nicol rectifying and completing the works, as evidenced by the notices to remedy breach sent by Mr Sutton to Mr Nicol.

Breach of contract – Mr Nicol

42. [42]
    I accept the evidence of Mr Sutton that on 26 April 2019 Mr Nicol left the site, taking his tools and demanded final payment under the contract. I note the evidence of Mr Nicol that he left the site on that day and did not intend to attach the last 12 sheets of board to the deck frame. He deducted the sum of $440.00 from his claim to take account of the value of that remaining work.
43. [43]
    I accept the evidence of Mr Waris that as at 26 April 2019 the structure was not built as specified in the drawings and that in order to be compliant with the Building Code of Australia and the engineering drawings it was necessary for additional joists to be installed where the spacing between joists exceeded 450 mm centre to centre.
44. [44]
    On the basis of Mr Waris’s evidence I conclude that as at 26 April 2019 the works were not certified and that the Form 16 put in evidence bearing that date is not reliable evidence that the works were in fact certified at that date. I accept the evidence of Mr Sutton that he first received the Form 16 in November 2019 after rectification work had been carried out by Mr Barr and after an engineer’s inspection on 18 November 2019.  The Form 16 was signed by Mr Hills who has now passed away. It is not possible to discern what explanation there may be for the Form 16 bearing the date 26 April 2019. As Mr Waris is the engineer who inspected the works on all relevant dates, I accept his evidence as to whether the works were compliant sufficient for a Form 16 to issue. I find that the works were not compliant with the Engineering Drawings forming part of the contract and in turn were not compliant with the Building Code of Australia.
45. [45]
    As to whether Mr Nicol was entitled to demand final payment under the contract as at 26 April 2019, I note that final payment was due upon “practical completion”. In normal parlance the expression has been held to mean “completed for all practical purposes”.^[10] In other words the works are generally able to be used for the purpose contemplated by the agreement.^[11]
46. [46]
    The QBCC Act defines ‘practical completion’ for a domestic building contract to mean the day when the subject work is completed in compliance with the contract including all plans and statutory requirements and without any defects or omissions, other than minor defects or omissions that will not unreasonably affect occupation.^[12]
47. [47]
    I find that because of non-compliance with the engineering drawings and failure to install the last 12 sheets of board over the frame, the pool cover was not practically complete on 26 April 2019.
48. [48]
    For these reasons, I find that Mr Nicol had no entitlement to demand final payment under the contract on 26 April 2019 because the works had not reached practical completion stage.
49. [49]
    I find that Mr Nicol is in breach of warranties implied into the contract between the parties by sections 21, 22 and 23 of Schedule 1B of the QBCC Act in relation to, respectively, compliance with legal requirements, standard of work and exercise of care and skill and adherence to plans and specifications.
50. [50]
    I find that Mr Nicol’s conduct in leaving the project whilst the work was defective and incomplete and demanding final payment before it fell due was a breach of his contractual obligation to construct the pool cover in accordance with the engineering drawings.

Entire contract

51. [51]
    Apart from the question of breach, and relevant to the issue of whether Mr Nicol is entitled to maintain a claim for payment of the balance of the contract price is the status of the contract. I find that the contract is an entire contract, meaning that Mr Nicol had no entitlement to payment until he completed the works.^[13] Mr Nicol was engaged to construct a cover or deck over a pool. The project was not one which could be divided into parts. The contract expressly provides for payment of the final sum upon practical completion. That is, there is no entitlement to payment if the work does not reach practical completion. The fact that a contract provides for staged payments does not mean a contract may not be construed to be entire. Most building contracts are construed as entire on the basis that a partially completed structure is of little use to an owner.^[14] This is not a case where there has been substantial compliance with the contract so as to justify payment, given that the work was non-compliant with the engineering drawings and unable to be used.^[15]

Termination of the contract

52. [52]
    The exchange of correspondence and notices between the parties set out in Mr Sutton’s evidence reveals and I find that Mr Nicol’s conduct was a repudiation of the contract in the sense that he evinced an intention to no longer be bound by the contract.^[16] Mr Nicol’s position that he would only complete the work upon payment of his invoice is further evidence of repudiatory conduct in that he would only perform the contract on his own terms.^[17]
53. [53]
    Despite this repudiatory conduct Mr Sutton affirmed the contract on 29 April 2019 and again on 16 May 2019 by requiring Mr Nicol to rectify and complete the work.
54. [54]
    On 24 May 2019 Mr Sutton terminated the contract on the basis that Mr Nicol had not responded to his requirement given on 16 May 2019 that the building works be rectified within a period of seven days. I find that Mr Sutton has lawfully terminated the contract at common law by accepting Mr Nicol’s repudiation of the contract in failing to rectify and complete the work.
55. [55]
    As I have found that Mr Nicol was in breach of contract and had repudiated the contract it follows that he was unable to terminate the contract.^[18]

Relief sought by the parties

56. [56]
    Mr Nicol seeks the following orders from the Tribunal:

    1. (a)
       Mr Sutton pay him the sum of $5,462.00 comprising the amounts set out in his final notice dated 6 May 2019;^[19] and
    2. (b)
       Mr Sutton pay for a variation to the contract in the sum of $600.00, on a quantum meruit basis, for the cost of digging and carting soil.
57. [57]
    On the basis of my finding that the contract is an entire contract Mr Nicol is not entitled to recover the sums claimed because he had not completed the works as at the date of termination. Furthermore, the time for payment of the sums claimed had not accrued as at the date of termination.
58. [58]
    However, Mr Nicol’s claims must still be assessed to determine if Mr Sutton would have been liable to pay the sums claimed if the contract had been fully performed. That is because Mr Sutton has claimed damages for breach of contract.
59. [59]
    Mr Sutton is entitled to recover an amount which will put him in the same position, so far as money can do so, as if the contract had been fulfilled. In assessing damages for breach of contract credit must be given for the unpaid balance of the contract. Mr Sutton may only recover the net loss sustained, that is, the value of the benefit of the contract fully performed less the contracted price for securing such performance.^[20]
60. [60]
    Mr Sutton seeks the following orders from the Tribunal:

    1. (a)
       Relief from payment of the final contract payment of $6,000.00.
    2. (b)
       Mr Nicol to pay Mr Sutton the following sums:

       1. $3,500.00 being the cost of rectification and completion;
       2. $1,133.56 for the purchase of additional joists;
       3. $2,000.00 for incidentals paid for by Mr Sutton for which no receipts were given in accordance with the contract.
61. [61]
    On the basis that I have found that the contract is an entire contract and that Mr Nicol is in breach of contract with no right to recover money which has not accrued for payment at the date of termination, Mr Sutton is relieved from payment of Mr Nicol’s final invoice and his claim for a variation.^[21] Mr Sutton must however give credit for the value of work performed by Mr Nicol which he would otherwise have been obliged to pay if the contract had been fully performed.
62. [62]
    Mr Barr gave evidence that he constructed two hatches and installed vertical skirting. That work was extra to the contract with Mr Nicol. The cost of that work was $700.00. That is a cost to Mr Sutton not recoverable from Mr Nicol. Accordingly, Mr Sutton’s claim for recovery of the cost of rectification is reduced to $2,800.00. Otherwise, I accept that the rectification and completion work was required to achieve conformity with the works the subject of the agreement between the parties and that the work was necessary and reasonable.^[22]
63. [63]
    I accept that it was necessary to purchase extra joists and that the value of the joists was $1,133.56. I accept that Mr Sutton is entitled to seek recovery of that cost from Mr Nicol.
64. [64]
    As to recovery of the sum of $2,000.00 paid in advance for purchase of materials, I accept the evidence of Mr Nicol that incidental materials were purchased to a value of $660.00. Mr Nicol did not provide receipts, however I do not consider that is a breach giving rise to a claim for damages. Each item is necessary for the work and no item appears to be an unreasonable cost. I do not consider that Mr Sutton has suffered a loss as a result of Mr Nicol’s failure to provide receipts. The sum of $660.00 is not recoverable.
65. [65]
    However, the balance of the $2,000.00 is recoverable as it was not expended on materials. Mr Sutton is entitled to recover $1,340.00. I note Mr Nicol accepts that some credit is due to Mr Sutton for the unused portion of the sum of $2,000.00, however his calculations differ for the following reasons.
66. [66]
    As part of his accounting for expenditure of the sum of $2,000.00 Mr Nicol claims the sum of $720.00 for cutting and welding. It appears cutting and welding work was not originally to be undertaken by Mr Nicol, however he arranged for the performance of welding work in order to assist Mr Sutton to achieve a lower cost for the work. The cutting and welding work is a variation to the contract. It is not recorded in writing as required by the contract and section 40 of Schedule 1B to the QBCC Act, however that does not appear to be a bar to recovery of the value of the work performed either on a contractual basis or on a quantum meruit. The only evidence as to the value of the work comes from Mr Nicol. I accept his evidence that the welding work was done with the consent of Mr Sutton and that the agreed value of that work is $720.00. Mr Sutton criticises the quality of the work performed, however he has not sought to rectify the work. I consider that if the contract had been fully performed by Mr Nicol, Mr Sutton would be liable to pay the sum of $720.00 for cutting and welding as a variation to the contract and that the sum must be taken into account in assessing Mr Sutton’s damages.
67. [67]
    Mr Nicol claims the value of a further variation to the contract being $600.00 for the cost of digging and carting soil when he found that the machine hired for the job by Mr Sutton was inappropriate for the task. Again, the variation is not in writing. Mr Sutton’s evidence is that he did not ask Mr Nicol to do the work by hand and that the machine hired by him for the job removed the soil.
68. [68]
    As Mr Nicol has not provided any evidence that Mr Sutton requested or approved the variation and given the disputed facts as to how the soil was removed, I accept the evidence of Mr Sutton and find that Mr Nicol cannot recover the cost of digging and carting soil in the sum of $600.00 as a variation, either on a contractual or quantum meruit basis. On that basis the sum will not be taken into account in the assessment of Mr Sutton’s damages.
69. [69]
    Mr Nicol’s final invoice also records a variation relating to the “construction of nogs to both sides” to accommodate the hatch he was preparing to install. The value claimed is $480.00. There is no written variation. Mr Sutton does not dispute that he requested a hatch nor that preparatory work for the hatch was performed. I accept Mr Nicol’s evidence as to the value of that work. I find that Mr Nicol would have been entitled to recover the value of this work as a variation on a contractual or quantum meruit basis if the contract was fully performed. The sum must be taken into account in the assessment of Mr Sutton’s damages.
70. [70]
    I assess Mr Sutton’s damages for breach of contract as follows:

71. [71]
    The result is that after accounting for the unpaid balance of the contract price, the unpaid moneys exceed Mr Sutton’s damages for breach of contract. Despite this outcome, Mr Nicol’s claim does not convert to a cause of action for the balance monies because of the operation of the principles relating to an entire contract.^[23]
72. [72]
    Mr Nicol has failed in his claim. Mr Sutton’s claim for damages is entirely met by a set-off for the unpaid balance of the contract price.
73. [73]
    The appropriate orders are to dismiss both Mr Nicol’s claim and Mr Sutton’s claim.